Disclaimer: Coverage terms, conditions and availability vary by insurer and location. Consult with licensed insurance professionals for specific coverage advice.
Marine Insurance
Marine insurance protects cargo, vessels and freight during water transport from risks your standard policy won't cover, including storms, piracy and port delays.
Find the right marine insurance policy for your shipping operation below.
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Updated: October 16, 2025
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Key Takeaways
Marine insurance protects vessels, cargo and freight from financial losses during water transport, including storms, theft, collisions and piracy.
Standard coverage excludes improper packing, normal wear and tear, and specialized risks like war or strikes.
- Insure cargo at 110% of its value to avoid co-insurance penalties and get your money back if something happens.
What Is Marine Insurance?
Marine insurance provides financial protection for vessels, cargo and freight transported by sea. It includes losses from perils like sinking, collision, theft and weather damage during ocean transit. Whether shipping electronics from Asia or operating a commercial vessel, this coverage keeps you from losing money.
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Marine Insurance vs. Inland Marine Insurance
Marine insurance covers vessels and cargo during ocean transport. Inland marine insurance protects high-value property moving over land: construction equipment, fine art, jewelry and mobile tools. Despite the name, "inland marine" has nothing to do with water - it's a historical term for coverage that now applies to valuable items in transit or those difficult to insure under standard property policies.
Comparison Table: Ocean vs Inland Coverage
Transit Mode | Ships, cargo vessels, ocean freight | Trucks, trains, domestic carriers |
Geographic Scope | International waters, ocean routes | Domestic land transport |
Typical Cargo | Containerized goods, bulk shipments, international freight | Construction equipment, jewelry, fine art, mobile property |
Coverage Period | Port to port or warehouse to warehouse across oceans | Origin to destination within country borders |
Common Users | Importers, exporters, international shippers | Contractors, jewelers, art dealers, domestic shippers |
What Does Marine Insurance Cover?
Marine insurance may provide financial protection for cargo, vessels and freight lost or damaged during ocean transport, subject to policy terms and conditions.. You're covered for losses from sinking, collision, fire, piracy, theft and severe weather. Your coverage protects shipments from the origin warehouse to final destination, including port handling.
Marine Insurance Coverage at a Glance
Marine Cargo Insurance | Goods and merchandise in transit by sea | Importers, exporters, e-commerce businesses |
Hull Insurance | Physical damage to vessels from collision, grounding, fire | Vessel owners, shipping companies |
Freight Insurance | Loss of freight charges if cargo doesn't reach destination | Carriers, freight forwarders |
Liability Insurance | Third-party damage, pollution, crew injury claims | Vessel operators, maritime businesses |
Common Covered Perils
Vessel Sinking or Capsizing
Complete loss when your vessel goes under or overturns during transit.
Collision
Damage from impact with other ships, icebergs, docks or underwater objects.
Fire or Explosion
Losses from fires, explosions or lightning strikes onboard the vessel.
Piracy and Theft
Cargo stolen by pirates, hijackers or thieves during ocean transport.
Severe Weather
Damage from hurricanes, typhoons, cyclones, storms or heavy seas.
General Average
Your share of costs when cargo is jettisoned to save the vessel and crew.
Port Accidents
Damage during loading, unloading or while cargo is temporarily stored at port.
What Marine Insurance Doesn't Cover
Standard marine insurance excludes damage you can prevent and risks outside typical ocean transport. Your policy won't cover losses from improper packing, delivery delays, product defects or normal wear and tear. War, strikes and nuclear incidents require specialized war risk coverage.
Marine Insurance Exclusions Table
Preventable Damage | Improper packaging, inadequate cargo securing, poor labeling, willful misconduct, fraud, normal wear and tear | Your insurer will want to see you've taken basic steps to protect what you're shipping. |
Product and Shipping Issues | Inherent vice (goods deteriorating naturally, like fresh produce spoiling), delivery delays, market value losses, carrier insolvency, customs or quarantine delays | These stem from the nature of goods or circumstances beyond standard coverage scope. |
High-Risk Events | War, terrorism, strikes, riots, civil unrest, nuclear incidents, cyber attacks | Standard policies won't cover these scenarios. You'll need separate war risk or cyber insurance. |
MONEYGEEK EXPERT TIP
Report incidents within 24 to 48 hours or risk claim denial. Keep bills of lading and shipping documents, and watch filing deadlines. Underinsurance causes the biggest financial hit: insuring $50,000 of cargo worth $100,000 gets you only 50% recovery due to co-insurance penalties. Insure full cargo value plus 10% to avoid partial payouts.
How Much Marine Insurance Do You Need?
Cover your cargo's full value, then add 10% on top. Without that cushion, you'll get hit with co-insurance penalties if you file a claim. Here's how to calculate your marine cargo insurance coverage: Add up what your goods cost, plus freight charges and your insurance premium. Multiply that total by 1.1.
Example calculation:
Cost of goods | $200,000 |
Freight charges | $8,000 |
Insurance premium | $600 |
Base value (CIF) | $208,600 |
Required coverage (CIF × 1.1) | $229,460 |
Skip that extra 10% and co-insurance penalties and reduce your payout. Your marine cargo insurance only covers a portion of losses. You pay the rest yourself.
Who Needs Marine Insurance?
Importers/Exporters | Protect international shipments from total loss | Full cargo value + freight + 10% |
E-Commerce Businesses | Cover inventory crossing oceans to customers | Per-shipment value or annual policy |
Manufacturers | Protect raw materials and finished goods in transit | Cargo value plus production costs |
Freight Forwarders | Client goods under your care and control | Legal liability limits (often required) |
Vessel Owners | Physical damage to ships and maritime liability | Hull value + liability coverage |
Marine Insurance Coverage: Terms and Conditions
Most ocean marine insurance policies follow the Institute Cargo Clauses in three levels:
Clause A
Gives you the broadest protection. It's "all-risk" coverage that pays for almost any loss except deliberate damage or normal wear and tear.
Clause B
Covers major perils like collision, fire and natural disasters, earthquake, lightning and jettison. It's your middle ground between comprehensive and basic marine cargo insurance.
Clause C
Only covers specific named perils: fire, explosion, vessel sinking, collision and overturning. One of these events must damage your cargo to qualify for a payout.
Higher-value shipments typically need Clause A. Consider Clause C if you ship durable goods on established routes.
MONEYGEEK EXPERT TIP
Contact your insurer within a day or two of any incident. Provide bills of lading, invoices, packing lists and survey reports. Minimize damage, preserve evidence, and don't admit liability or settle without insurer approval.
Marine Insurance Policy: Bottom Line
Your marine insurance protects against storms, theft, collisions and piracy but won't cover poor packing or war damage. Cover your full cargo value plus 10% or face co-insurance penalties that slash your payout.
Marine Insurance: FAQ
Here are answers to frequently asked questions about marine insurance:
How much does marine insurance cost?
Marine insurance costs 0.2% to 2% of your cargo's value. A $100,000 electronics shipment from China runs $200 to $2,000 based on your insurer and route. Dangerous routes, hazardous materials and valuable goods drive premiums up. Frequent shippers cut costs with annual policies, saving 20% to 40% per shipment over one-time coverage.
How do I file a marine cargo insurance claim?
Contact your insurer within 24 to 48 hours of discovering damage. Request an independent cargo survey to document the loss. Gather your bill of lading, commercial invoice, packing list and photos. Submit everything within 30 to 90 days. Most claims settle in four to eight weeks with complete documentation.
Should I buy single-shipment or annual marine insurance?
Buy single-shipment coverage if you ship internationally a few times per year. Annual policies cost less per shipment for regular shippers and automatically cover all cargo up to your declared value. You'll skip purchasing coverage before each shipment, and protection starts when goods leave your warehouse.
Who pays for ocean marine insurance: buyer or seller?
Your Incoterms agreement determines this. Under CIF terms, sellers buy insurance and include costs in their price. Under FOB terms, buyers arrange coverage. Smart buyers often purchase additional insurance even when sellers provide it, ensuring full protection rather than relying on minimal seller coverage.
What's the difference between Institute Cargo Clauses A, B and C?
Clause A provides "all-risk" coverage for virtually any loss except specific exclusions. Clause B covers Clause C perils plus earthquake, lightning and seawater damage. Clause C covers only major perils like fire, collision and sinking. Choose A for high-value cargo, C for bulk shipments.
What is general average in marine insurance?
General average applies when cargo is sacrificed to save a vessel during emergencies, like throwing containers overboard in storms. All cargo owners and the vessel owner share the loss proportionally, even if your goods weren't damaged. Your insurance covers this contribution, which can reach tens of thousands.
What is marine insurance, and does it replace carrier liability?
Marine insurance protects cargo, vessels and freight from financial losses during water transport. It doesn't replace carrier liability. Carriers limit responsibility to $500 per package under international conventions. Without marine insurance, you might recover only $5,000 from a carrier on a $100,000 loss.
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.